Investors focused on Spain, where the main share index lost3.9 percent and yields on 10-year bonds hit 6 percent onworries about Madrid's commitment to reform due to violentprotests and talk of secession by the wealthy Catalonia region.

A general strike in Greece and signs of discord among topeuro zone officials over new policies to tackle the crisis addedto investor concerns, taking the gloss off recent moves by theEuropean Central Bank to calm markets by buying bonds.

International lenders are at loggerheads over how to solvethe crisis in Greece, threatening more trouble for the euro zoneas the International Monetary Fund demands European governmentswrite off some of the Greek debt they hold.

The euro fell to $1.2836, a two-week low, and tradedat $1.2854, down more than 0.3 percent on the day.

Crude oil prices fell more than 1 percent and stocks on WallStreet followed European shares lower, though not as sharply.Stocks in the euro zone suffered their worst session in twomonths.

"There is still a real risk that Europe has to make somedecisions that could hold the market together or not hold themarket together over the next few weeks as it relates to Greeceand certainly Spain," said T. Doug Dale, chief investmentofficer for Security Ballew in Jackson, Mississippi.

Yields on Spain's 10-year bond topped 6percent for the first time in a week.

Traders and investors active in the market have realizedthat despite reduced risks, the ECB's bond-buying program doesnot resolve all the problems in the euro zone, analysts said.

A fresh batch of weak data and gloomy corporate reports fromacross the globe weighed on sectors most sensitive to theeconomic cycle, like autos and basic resources.

In the United States, the view of the economy deterioratedsharply in the third quarter and is now as bleak as it was inthe immediate aftermath of the last recession, according to asurvey of chief executives released by the Business Roundtable.

Slowing global growth is likely to crimp company profits.Caterpillar Inc cut its 2015 earnings outlook on Monday,as have FedEx Corp and Norfolk Southern, both ofwhich are economic bellwethers because of their shipping roles.

"Buyers have reached a point of exhaustion after FedEx andCaterpillar and the like, all of whom pointed to economicweakness," said James Dailey, portfolio manager at TEAM AssetStrategy Fund in Harrisburg, Pennsylvania.

"People had been buying on the idea that the Fed would propeverything up, but if they can't, there's real potential forpanic selling," Dailey said.

The Dow Jones industrial average was down 14.32points, or 0.11 percent, at 13,443.23. The Standard & Poor's 500Index was down 5.47 points, or 0.38 percent, at 1,436.12.The Nasdaq Composite Index was down 23.55 points, or0.76 percent, at 3,094.18.

U.S. government debt prices rose for an eighth straightsession as worries that Spain's reluctance to ask for afull-blown bailout would prolong Europe's debt crisis,supporting a bid for safe-haven debt.

The benchmark 10-year U.S. Treasury note was up9/32 in price to yield 1.6404 percent.

Brent crude oil, the global benchmark, fell more than 1percent to below $109 a barrel before paring some losses.